LONDON, Aug 22 (Reuters) - European stocks broke a three-day losing streak on Tuesday, building on gains in other markets and boosted by rising commodity prices.

U.S. stocks also looked set to open higher, with Wall Street futures up 0.2 percent. Gains by mining companies boosted European shares after strong commodities prices steadied Asian markets earlier.

London copper rose to a three-year high, zinc held close to its highest in a decade and nickel , which is used in stainless steel, reached a high for the year.

BHP Billiton, the world’s largest mining company, reported a surge in underlying full-year profits and said it would exit its underperforming U.S. shale oil and gas business, pleasing shareholders who had called for a sale.

Mining companies were winding down debt and moving into a period of more sustainable profitability, Jasper Lawler, senior market analyst at London Capital Group. “We’re in a period of divergence between oil and metals,” he said.

The surge in mining shares pushed the broad index of European stocks up 0.4 percent on the day.

Meanwhile, the euro fell against the dollar on Tuesday, giving back most of its overnight gains as gains by the dollar prompted investors to square positions before a central bank conference this week.

Strong gains for the euro this year led investors to worry that European Central Bank chief Mario Draghi would not be able to ignore the issue as he prepared to speak at Thursday’s conference of central bankers in Jackson Hole, Wyoming.

“Even if Draghi does not even want to suggest a verbal intervention against euro strength, he cannot come across as completely carefree regarding the euro either,” Commerzbank analyst Esther Reichelt said.

A stronger euro cuts the price of imports, curtailing euro zone inflation. That makes it harder for the ECB to withdraw stimulus measures put in place after the debt crises of 2010-2012. The ECB’s key target is to boost inflation to just under 2 percent.

“I therefore consider levels beyond (this month‘s) high of $1.1910 to be extremely risky ahead of Jackson Hole,” she said.

Two sources have said Draghi will not deliver any new policy message at Jackson Hole.

The euro may have also been affected by proposals to introduce a parallel currency in Italy that have upped the ante for elections due next year.

The dollar index, which tracks the U.S. currency against a basket of six major currencies, was up 0.3 percent to 93.218

Tepid U.S. inflation data have made it less likely the Federal Reserve will raise U.S. interest rates anytime soon, weakening the dollar. So have doubts that U.S. President Donald Trump can implement the stimulus programmes and tax reforms he had promised.

Elsewhere, crude oil prices rose, lifted by indications that supply is gradually tightening, especially in the United States . Brent crude futures LCOc1 added 34 cents to $52 per barrel.

For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets

Reporting by Abhinav Ramnarayan, Additional reporting by Lisa
Twaronite in Tokyo and Kit Rees in London; Editing by Larry
King